In a significant relief to hospitality giant OYO, the Rajasthan High Court has granted interim protection from coercive action in a case filed by Samskara Resort, which alleged that the IPO-bound company inflated earnings by fabricating resort bookings. The claims led to a GST notice amounting to INR 2.66 Cr being served to Samskara Resort, located in Jaipur.
A single judge bench, headed by Justice Praveer Bhatnagar, took strong cognizance of what it described as “misleading and factually incorrect” allegations made against OYO. The Hon’ble Court issued notice to Madan Jain, Director of Samskara Resort, and directed the police to submit a status report within two weeks. The matter is scheduled for a further hearing after three weeks.
In its ruling, the court noted Samskara’s failure to furnish critical documents, including check-out records, blocked room data, and a copy of the operational agreement—facts material to the case. OYO, in a statement to Startup Story, said: “The court observed that Samskara Resort failed to furnish critical information such as check-out records, blocked room data, and a copy of the operational agreement—facts material to the case. It appears that the resort owner is attempting to deflect attention from tax-related concerns, particularly issues related to GST compliance.”
The court was hearing a plea by OYO seeking the quashing of an FIR filed by Samskara Resort (Saboo Sodium Chloro Limited). The FIR, lodged last week by Madan Jain under the Bharatiya Nyaya Sanhita (BNS), included charges of cheating, criminal breach of trust, forgery, and criminal conspiracy.
Justice Bhatnagar acknowledged that it was Samskara, not OYO, that failed to provide the booking sale register and agreement, indicating lapses on the part of the resort. Representing OYO, Senior Advocates RB Mathur and Lipi Garg stated: “The hon’ble court also acknowledged that the FIR in question was unwarranted and unfair. OYO’s records clearly show that a significant portion of the bookings at the property were walk-ins, likely recorded directly by the hotel’s own staff during the contract term with OYO.”
They also confirmed that OYO has filed a defamation case against Madan Jain in the Delhi High Court.
The FIR claims that Samskara signed a 12-month agreement with OYO in 2019 and conducted business worth INR 10.95 Lakh, paying applicable GST. However, OYO allegedly recorded bookings worth INR 22.22 Cr between FY19, FY20, and FY21, resulting in the pending GST bill of INR 2.66 Cr and additional penalties.
OYO denied the allegations, issuing the following statement: “The hotelier is deliberately attempting to shift focus from his own GST liabilities by falsely implicating OYO. Our records clearly show that a significant portion of the bookings at the property were walk-ins, likely entered directly by the hotel’s staff during the contractual period.
This entirely disproves the baseless allegation of fake bookings. OYO has had no business association with this hotel for (the) last 3–4 years. We are confident that the misleading FIR will be quashed in due course,” said a company spokesperson.
This development comes just a day after OYO publicly denied all allegations and reiterated its compliance with legal and tax obligations.
Meanwhile, the company continues to show strong financial performance. According to founder Ritesh Agarwal, OYO is expected to report a 60% year-on-year jump in revenue to INR 2,100 Cr in the final quarter of FY25. The company turned profitable in FY24 with a net profit of INR 229.5 Cr, reversing a net loss of INR 1,286.5 Cr in the previous fiscal. However, its operating revenue stood at INR 5,388.7 Cr in FY24, a marginal decline of 1.3% compared to FY23.